Timothy Casey Theisen P.A.

Bankruptcy and Family Law Firm My practice is solely limited to consumer bankruptcy and family law. By concentrating my areas of practice, I have developed the experience and expertise necessary to guide you through this difficult process and the efficiency to handle your case with minimal cost and as quickly as possible.

Operating as usual

12/01/2021

Merry Christmas from Theisen Law, Divorce and Bankruptcy Attorney!

09/16/2021

hennepinhpp.com

Hennepin County announces grants to avoid foreclosure

Hennepin County and the City of Minneapolis just announced that they will set aside $4.3 million, up to $35,000 per homeowner, to help make mortgage payments that were missed due to pandemic. Applicants will first need to apply for other loss mitigation options, for which assistance is also being provided. The funding for this came from Congress. Applications to the program can be made at www.hennepinhpp.com or by calling 651-236-8952

It is not yet clear whether other counties will follow suit.

Chapter 13 bankruptcy remains a viable option to stop foreclosure when other options don’t work, and we can help with that.

hennepinhpp.com

How to minimize credit damage from medical bills 09/02/2021

How to minimize credit damage from medical bills

https://www.startribune.com/how-to-minimize-credit-damage-from-medical-bills/600093178/

How to minimize credit damage from medical bills If you're facing big bills from COVID-19 or other medical issues and you're worried about your credit, keep this in mind: Your credit score can recover if it is badly damaged, but there are no such guarantees about your health.

[08/04/21]   Congress takes up student loan bankruptcy-discharge bill

Yesterday Senator Richard Durbin (D-IL) and Senator John Cornyn (R-IL) introduced “Fresh Start Through Bankruptcy Act”, bipartisan legislation, that will restore the ability to discharge student loans in bankruptcy.

This is the first bipartisan effort in the U.S. Senate since 1998, when this discharge right was eliminated, that will provide bankruptcy relief for struggling borrowers across the country. The bipartisan bill contains a 10 year waiting period and clawback provisions to permit the Department of Education to recover funds from institutions with higher repayment default rates.

Additionally yesterday, the Senate Committee on the Judiciary held a hearing entitled “Student Loan Bankruptcy Reform”. During the hearing Senator Durbin shared stories in his opening statement from struggling student borrowers and argued for the need to allow them the ability to discharge their loans in bankruptcy as a last resort.

The text of the bill has not yet been made publicly available.

NYC surgeon seeking divorce claims beauty queen wife led secret life as high-priced call girl: court documents 07/27/2021

NYC surgeon seeking divorce claims beauty queen wife led secret life as high-priced call girl: court documents

I’ve seen a lot of interesting things over 30 years of doing divorces, but I haven’t come across a case like this  https://www.nydailynews.com/new-york/ny-nyc-surgeon-accuses-wife-call-girl-20210725-uzj7xdryrjfd3m4xy7paf2jxp4-story.html

NYC surgeon seeking divorce claims beauty queen wife led secret life as high-priced call girl: court documents A prominent Manhattan spinal surgeon’s storybook marriage to a one-time beauty queen turned irreversibly ugly after he stumbled upon her secret life as a high-end ho**er, according to stunning court documents obtained by the Daily News.

07/11/2021

Bankruptcy Attorney Tim Theisen talks about his St. Paul roots, and St. Paul office.

Supreme Court declines to hear case involving bankruptcy discharge of student loan debt - Tim Theisen 06/29/2021

Supreme Court declines to hear case involving bankruptcy discharge of student loan debt - Tim Theisen

Supreme Court declines to hear case involving bankruptcy discharge of student loan debt

In bankruptcy, student loans are not dischargeable unless the borrower initiates and can prevail on a separate lawsuit to determine that it would be an undue hardship to pay it back. Courts have interpreted this to be a relatively high standard, virtually impossible in most cases. A separate line of litigation can involved whether the loan is actually for an educational benefit.

The US Supreme Court accepts very few cases. By declining to accept this case, the difficult standards of the student loan issue, and whether bankruptcy remedies can be eased, will be up to Congress.

Supreme Court declines to hear case involving bankruptcy discharge of student loan debt - Tim Theisen In bankruptcy, student loans are not dischargeable unless the borrower initiates and can prevail on a separate lawsuit to determine that it would be an undue hardship to pay it back. Courts have interpreted this to be a relatively high standard, virtually impossible in most cases. A separate line of...

Timothy Casey Theisen P.A. updated their information in their About section. 06/14/2021

Timothy Casey Theisen P.A. updated their information in their About section.

Timothy Casey Theisen P.A. updated their information in their About section.

06/08/2021

Foreclosure rates have continued to dwindle since they peaked in 2010. A recent article talked about reasons why there is not likely to be anywhere near the surge that we had experienced during the last recession. There are a few additional reasons that I have observed, why I believe this is true.
While the last peak of filings had been preceded by a run up of values like we have experienced in the last couple of years, the mortgage industry has tightened down and increased lending standards. There are a lot fewer exotic mortgages, and it is more difficult for investors to get multiple mortgages. we are also seeing a lot less exotic product such as arms which would adjust at super high rates, $0 down mortgages, 80-10-10 products, people dipping into home equity loans, nor do we see the so-called “ninja” loans that we used to see -- no income, no jobs or assets.
Also, loan modification markets, which was something that mortgage companies had to scramble to create 12 years ago, are now well refined, and are standard in the industry. So most people who are in trouble, can modify their mortgage two acceptable terms, often with lower interest rate, re amortized over up to 40 years, a portion of the principle deferred or sometimes even waived, an ultimately lower payments. In my opinion, it's probably not a good practice for the market to let people continually modify their mortgages, so some mortgage companies will have a limit on how many modifications can be done within so many years, but with all of the federal mandates in place, most people are getting modifications.
Because I have seen more people carrying equity than I saw 12 years ago, if people do end up getting in trouble and not being able to modify or refinance, they have the option of selling. 10-12 years ago, when values were plummeting, buyers and investors were spooked because they didn't know when or if we were going to hit the bottom of the market. At the time, real estate had never seen a yearly decrease in values in most people's lifetime. Now people realize that real estate cannot continue to decrease in value and will eventually go back up.

The big wild card in all of this is interest rates, which have been at historic lows for over 15 years. I had predicted, 15 years ago, that it would be an increase in rates that would stall the housing market. I was wrong, it was all of the other factors above, none of which really seemed to be in place in 2021.

https://www.theisenlaw.com/why-there-wont-be-another-foreclosure-stampede-like-2009-2010/

Foreclosure rates have continued to dwindle since they peaked in 2010. A recent article talked about reasons why there is not likely to be anywhere near the surge that we had experienced during the last recession. There are a few additional reasons that I have observed, why I believe this is true.
While the last peak of filings had been preceded by a run up of values like we have experienced in the last couple of years, the mortgage industry has tightened down and increased lending standards. There are a lot fewer exotic mortgages, and it is more difficult for investors to get multiple mortgages. we are also seeing a lot less exotic product such as arms which would adjust at super high rates, $0 down mortgages, 80-10-10 products, people dipping into home equity loans, nor do we see the so-called “ninja” loans that we used to see -- no income, no jobs or assets.
Also, loan modification markets, which was something that mortgage companies had to scramble to create 12 years ago, are now well refined, and are standard in the industry. So most people who are in trouble, can modify their mortgage two acceptable terms, often with lower interest rate, re amortized over up to 40 years, a portion of the principle deferred or sometimes even waived, an ultimately lower payments. In my opinion, it's probably not a good practice for the market to let people continually modify their mortgages, so some mortgage companies will have a limit on how many modifications can be done within so many years, but with all of the federal mandates in place, most people are getting modifications.
Because I have seen more people carrying equity than I saw 12 years ago, if people do end up getting in trouble and not being able to modify or refinance, they have the option of selling. 10-12 years ago, when values were plummeting, buyers and investors were spooked because they didn't know when or if we were going to hit the bottom of the market. At the time, real estate had never seen a yearly decrease in values in most people's lifetime. Now people realize that real estate cannot continue to decrease in value and will eventually go back up.

The big wild card in all of this is interest rates, which have been at historic lows for over 15 years. I had predicted, 15 years ago, that it would be an increase in rates that would stall the housing market. I was wrong, it was all of the other factors above, none of which really seemed to be in place in 2021.

https://www.theisenlaw.com/why-there-wont-be-another-foreclosure-stampede-like-2009-2010/

05/28/2021

After 14 years of having the best assistant a lawyer could ever ask for, my trusted assistant will be moving on to new adventures.

Amy thank you for helping my practice prosper and flourish for the last 14 years. I wouldn’t be half the lawyer or man I have become without you. ❤️

Best of wishes in your new endeavors. You will leave big shoes to fill.

After 14 years of having the best assistant a lawyer could ever ask for, my trusted assistant will be moving on to new adventures.

Amy thank you for helping my practice prosper and flourish for the last 14 years. I wouldn’t be half the lawyer or man I have become without you. ❤️

Best of wishes in your new endeavors. You will leave big shoes to fill.

What is the process for divorce in Minnesota? - Tim Theisen 05/25/2021

What is the process for divorce in Minnesota? - Tim Theisen

I believe in marriage, but when it doesn't work, I can help you out. https://www.theisenlaw.com/what-is-the-process-for-divorce-in-minnesota/

What is the process for divorce in Minnesota? - Tim Theisen The court system considers a divorce to be a lawsuit, that ultimately gets decided by a judge after a trial, if the parties cannot come to an agreement. However, over 95% of divorce cases are settled before trial. Here is an outline of the basic steps that occur in a fairly typical divorce: At the [...

Most homeowners have exited mortgage forbearance programs—but those who are left are the most vulnerable 05/22/2021

Most homeowners have exited mortgage forbearance programs—but those who are left are the most vulnerable

I just had another client today, restructure the payment she’s missed for the last year, into a new mortgage over 40 years, thus lowering her payments. A loan modification is usually the best way to save your house if you’re having troubles. 
https://www.cnbc.com/2021/05/21/most-homeowners-have-ended-forbearance-but-those-left-are-vulnerable.html

Most homeowners have exited mortgage forbearance programs—but those who are left are the most vulnerable About two-thirds of homeowners who signed up for some type of mortgage forbearance during the Covid-19 pandemic have exited the program as of March 2021.

One-third of people who delayed mortgage payments during COVID-19 used cash for groceries, utilities 05/11/2021

One-third of people who delayed mortgage payments during COVID-19 used cash for groceries, utilities

Many people who are in mortgage forbearance are using that money to pay down their credit cards, explaining the current reduction in bankruptcy filings. https://www.usatoday.com/story/money/2021/05/10/homes-near-me-forbearance-delay-mortgages-covid/7338107002/

One-third of people who delayed mortgage payments during COVID-19 used cash for groceries, utilities In a Credit Karma survey exclusive to USA TODAY, 59% of people felt their financial stability depended on their ability to delay mortgage payments.

Bankruptcy: Last Week Tonight with John Oliver (HBO) 04/21/2021

Bankruptcy: Last Week Tonight with John Oliver (HBO)

John Oliver discusses bankruptcy, and as usual, nails it with historical perspective and humor. https://www.youtube.com/watch?v=GzFG0Cdh8D8

Bankruptcy: Last Week Tonight with John Oliver (HBO) John Oliver details why people file for bankruptcy, how needlessly difficult the process can be, and the ways we can better serve people struggling with debt...

SBA Issues Notice Extending PPP; Clarifies Eligibility for Borrowers in Bankruptcy | ABA Banking Journal 04/11/2021

SBA Issues Notice Extending PPP; Clarifies Eligibility for Borrowers in Bankruptcy | ABA Banking Journal

https://bankingjournal.aba.com/2021/04/sba-issues-notice-extending-ppp-clarifies-eligibility-for-borrowers-in-bankruptcy/?s=04&fbclid=IwAR1flnjKP8Hxe--VAkxgABXAEJggM9yTB8Og-YMcJYxcERsYZl-7jeU2uOE

SBA Issues Notice Extending PPP; Clarifies Eligibility for Borrowers in Bankruptcy | ABA Banking Journal The Small Business Administration last night issued a procedural notice to lenders regarding the extension of the Paycheck Protection Program.

College-age Americans who didn't get stimulus checks last year could get up to $1,800 this tax season 03/26/2021

College-age Americans who didn't get stimulus checks last year could get up to $1,800 this tax season

If you've got kids in college, here's some tax advice. Even though you couldn't claim them on the 2019 stimulus payments, you can now get the 2019 stimulus by claiming the recovery rebate on your 2020 tax return. And if you make too much to get the stimulus payments, your kid can just claim themself as an exemption for 2020 - they can get the $1200 + $600 from last year, plus the $1400. You'll lose the exemption which is worth $800, but I'm sure they'll buy if from you for $801, since they will get $3200! https://www.businessinsider.com/personal-finance/college-students-dependents-stimulus-checks-tax-return-2021-2

College-age Americans who didn't get stimulus checks last year could get up to $1,800 this tax season Insider's resident financial planner explains how former tax dependents who are eligible to file a 2020 return can collect unpaid stimulus money.

03/26/2021
03/16/2021

Is the stimulus exempt from creditors in bankruptcy?

Is the new stimulus protected from creditors in a bankruptcy?

The short answer is yes, the new federal stimulus is almost certainly protected from creditors outside of bankruptcy, or inside of bankruptcy. The reason I can only say “almost” certainly, has to do with a more complicated analysis of federal law versus state law, the way that Congress has denominated the various stimuli, including whether they are property of a bankruptcy estate, as well as treatment in Chapter 7 versus chapter 13.

Is it protected outside of bankruptcy?

When they did the first stimulus (CARES Act) in March of 2020, they rushed that through and didn't think about questions like this. So Governor Walz issued an order, and decreed that the stimulus was exempt from creditors under Minnesota law, because it is government assistance based on need. So that basically protects these funds while in the bank, or if a person needs to utilize Minnesota exemptions when they file bankruptcy. Meanwhile, the United states Trustee issued an advisory edict, indicating that even if these stimulus payments are property of a bankruptcy estate, they are of negligible value, and it basically said that Chapter 7 trustees would need to get permission from their supervisors before trying to take someone’s rebate. In other words, they knew it would be bad press & politically untenable, so they were highly discouraging it. In chapter 13 plans, our local trustees did not take a specific position, but their unofficial policy was not to consider these stimulus payments as additional disposable income.

Is the stimulus rebate property of a bankruptcy estate?

The Consolidated Appropriations Act of 2021, passed into law December 27th 2020, contained the second stimulus payment of $600. That bill specifically provided that any stimulus payment that Congress may enact within the next year, would be excluded from a bankruptcy estate, not included as income in chapter 13 plans, and also indicated that under federal law, the stimulus payments could not be touched by any creditors. So the exclusion from the bankruptcy estate still applies to the most recent a stimulus, however, the most recent stimulus did not have a similar provision protecting it from creditors outside of bankruptcy. While the lack of that provision may be relevant in other states, in Minnesota, we still have the governor's order indicating that the (last) stimulus is exempt from creditors, and to the extent it’s arguably not applicable to the most current stimulus, I would expect he will soon so clarify.

To the extent the recovery rebate stimulus is property of a bankruptcy estate, for a person who can protect their assets under federal exemptions, it is exempt as long as it’s within the $14,000 miscellaneous exemption limit, regardless of whether it has been received.

There are a few other provisions in the most recent stimulus package, including child tax credits, and earned income tax credits, some of which may be payable over the course of the year, and some of which may show up on your 2021 tax refund. It is still unclear whether those benefits might be property of a bankruptcy estate, but if they are, they would appear likely to be deemed exempt under state law, And also under the federal exemption as long as it's within the limit.

While I can't give advice that a person can rely and act upon in a blog post, I can tell you this: if you are considering bankruptcy , the biggest no-no you could do, would be to pay debts back to relatives before filing. A lot of people are finding that the stimulus is nowhere near enough to put a dent into there debts, and are utilizing it toward bankruptcy fees. If you owe money to relatives, you are free to do that after you file.

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